A resolution banning cattle slaughter in Sri Lanka was unanimously passed in the parliament few months ago, but a final decision on this is still pending. In this context, images of Sports Minister Namal Rajapaksa, elder son of Prime Minister Mahinda Rajapaksa, opening a meat-processing factory, claimed to be the largest of its kind in South Asia, at the Katunayake Export Processing Zone (EPZ), caught the attention of many netizens.
A number of social media posts suggested that the largest meat-processing factory in South Asia was established in Sri Lanka and large-scale cattle slaughtering would be followed soon after, in order to procure the meat for this factory. However, our investigation revealed that there are much larger meat processing factories in South Asia and that the beef based food products created at the Katunayake factory is minimal. Furthermore, company management confirmed that due to the low cost and high quality, imported beef would be used in this factory as well.
SOCIAL MEDIA POSTS:
“Asia’s largest meat factory in Sri Lanka! We were not fooled but we believed you” said a post on Anuradha Wijesooriya’s Facebook account with a picture of a cow crying. It was circulated among over thousand Facebook users.
This post implied that despite the hope given for ban on cow slaughtering a few months ago, a new large-scale beef-manufacturing factory had been opened in Sri Lanka.
“The Rally for Animal Rights & Environment- RARE” Facebook page and the Facebook user Pradeep Srimal also shared posts along similar lines indicating that the largest beef processing unit in South Asia has been launched in Sri Lanka.
These posts were accompanied by a series of photographs including an image from an article in the Daily Mirror online edition. Below are some of the other instance in which similar content had been shared among Facebook page and groups.
Our investigation began with a search into similar posts on this topic and we came across a Tweet from State Minister Kanchana Wijesekera, which stated that Sports Minister Namal Rajapaksa had opened a value-added factory for GILLS. The Tweet is seen below:
Due to Gills Foods being mentioned in the Tweet, we ran a keyword search on the company. Gunaratna de Zoysa, the company’s founder, had noted that Gills, which started as a small enterprise to meet the demand for high quality products and has since made rapid progress. The company grew its sales by 100% in the last 10 years and is also known as a frozen food processing company. Details of this business, which started as a family business, are also listed on their website. Gills Foods supplies to SriLankan Airlines, Pizza Hut, McDonald’s and Shangri-La, and is FSCC 22000 and SLS certified.
Explanation by the Management of Gills Foods:
To find out more about the new plant, we contacted Roshan de Zoysa (Chairman) and Chamal Silva (General Manager) of Gills. We received information about the background of the company as well as their products. Value added food product range produced by Gills include sausages, meatballs, ham, bacon, Chinese rolls, nuggets etc. Below is a description of Gills and their products how they have excelled in the business of value addition to food products.
In addition to above details, we inquired further about the much talked about new food processing plant in Katunayake EPZ. We were told that after conducting a lengthy study on the export market for meat products, Gills intended to expand their business by setting up a new factory, utilizing their experience and expertise gained over the past three decades. The feasibility study conducted by Gills was also forwarded for us to get a better idea about this venture.
Products made at the new food-processing factory in Katunayake:
The General Manager (GM) of the factory clarified that 98% of the factory’s products are poultry and fish based products. Poultry for chicken-based food products are sourced through poultry farmers in Sri Lanka with the intention of supporting the upliftment of the local economy. GM added that the factory intends to produce a limited quantity of beef products of around 2%.
We were also told that the beef produced in Sri Lanka is not of high quality and at the same time, relatively expensive therefore high quality beef could be obtained at a lower price from European countries or from Brazil. While the price of a local kilo of beef is around US $5, cost of importing beef would be around US$ 2 – 3 with no additional taxes. Therefore, it is ridiculous and baseless to say that this new factory will increase cattle slaughter in Sri Lanka.
Value Added Re-Exports and Tax Concessions Received:
The Chairman also clarified us that the process of importing beef and re-exporting as a value added produced is free from customs duty and other taxes, which falls under the TIEP1 facility. We also observed that 116,766 kilos of beef were imported to Sri Lanka in 2019 according to customs data.
Sri Lanka Customs stated the following regarding the tax relief received on import of raw material and value added re-export (TIEP).
The General Manager of Gills told us that although this value-added concessions were given to many industries, the value addition from most industries were around 2%, but that the value added portion through Gills Foods’ products was close to 40%.
The company management also told us that most of the beef based processed food, such as beef burgers, are exported to the Maldives at present and there are plans to widen the exports to some of the other regional countries in the future as well.
The New Factory’s Floor Area:
Stating that the new factory is not the largest food processing plant in South Asia, the General Manager said that Gills Foods extended operations to the Katunayake EPZ due to the insufficient space at their Wattala factory. He also said that the Katunayake factory takes up approximately 30,000 square feet. (Around 0.6 acres)
We noticed that there are huge meat processing factories in India. Here is a report of one such establishments called Miki Exports International, which boasts of a modern state of art meat processing complex spread across more than 20 acres (870,000 square feet), approximately 30 times larger than the Katunayake Gills Factory.
On December 12th 2020, Daily Mirror reported on the factory’s opening with the headline “South Asia’s largest meat processing factory opens in Sri Lanka” which became the subject of several posts on social media. However, the title was later changed to “South Asia’s largest food processing factory opens in Sri Lanka”.
We learned through the company’s management that 98% of Gills new factory in Katunayake is not dedicated to beef-based foods. Also, after a study on the meat processing market, they decided to expand their business to a new factory, as their former Wattala factory did not have enough space.
The management further stated that the factory imports beef for its beef related products and re-exports it with value additions, so that high quality meat can be obtained at a lower price than what is available in the Sri Lankan market due to tax concessions. However, the meat required for the factory’s main poultry products is procured through local poultry farmers.
Further, this factory is clearly not the largest meat factory in South Asia as there are several huge meat based food-processing factories in India.
Title:Rise in Sri Lanka’s cattle slaughter with the opening of South Asia’s largest meat processing plant? Here are the facts…Fact Check By: Shanaya Seneviratne